Credit cards most vulnerable to fraud

The total amount of payment fraud committed in Australia dropped over the past year, but credit cards remain by far the form of payments most commonly exploited by fraudsters.

According to the Australian Payments Clearing Association, the proportion of all transactions by cheque, debit card and credit card lost to fraud in 2007 fell from 6.3c to 6.2c per $1000 in 2007.

Cheques were the least defrauded payment option, with fraud falling from 1.9c to 0.8c per every $1000 worth of cheques written. The rate of debit card fraud also fell, from 7.7c per $1000 to 7.2c.

The only payment option to experience a worsening level of fraud was the credit card, with the rate of fraud increasing from 36.9c to 44.5c for every $1000.

According to the Australian Bankers’ Association, the poorer credit card fraud result reflects the trend towards using credit cards for online transactions, particularly where purchases are made overseas.

“Banks tell us that customers are increasingly shopping online with retailers located overseas, and unfortunately some of these outlets may not have strong customer protections in place,” ABA chief executive David Bell says. “It is very important for businesses and individuals to know with whom they are dealing before transferring or sending any money.”

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